Which concept describes a party's ability to enter into a contract?

The concept that describes a party's ability to enter into a contract is known as contractual capacity. This refers to the legal ability of individuals or entities to agree to the terms of a contract and be bound by its provisions. To have contractual capacity, a party typically must meet certain criteria, such as being of legal age and having sound mental judgment at the time of entering into the contract.

Contracts entered into by individuals who lack the requisite capacity—such as minors, individuals under duress, or those deemed mentally incompetent—may be voidable or unenforceable. Therefore, understanding contractual capacity is crucial in determining whether a contract can be legally upheld.

The other concepts, while important within the context of contracts, address different aspects. Consideration relates to the value exchanged in a contract, which is necessary for the agreement to be binding. Competence generally refers to a person's ability to perform or engage in activities, not specifically limited to contracting. Legality pertains to whether the contract's subject matter is lawful. Each plays a role in contract law but does not directly define the ability of a party to enter into a contract like contractual capacity does.